Name and Location
Ollachea gold project, Peru.

Client
Minera Kuri Kullu, a subsidiary of Mineral IRL.

Project Description
The Ollachea project hosts a Canadian National Instrument 43-101-compliant indicated resource of 10.1-million tonnes, grading 4 g/t gold for 1.3-million ounces of gold. Probable mineral reserves are indicated at 9.2-million tonnes, grading 3.4 g/t gold for one-million ounces of gold.

An updated mine plan has resulted in an optimised ramp-up at the project, with the average yearly gold output increasing to 100 000 oz over the first two years, up from 70 500 oz in the Ollachea definitive feasibility study (DFS).

The average yearly output will top 100 000 oz over the nine years of mine life, almost identical to that envisioned in the Ollachea DFS.

Total gold output has also risen to marginally from 921 000 oz  to 930 000 oz.

A conventional metallurgical processing plant will extract 91% of the gold and will have a capacity of 1.1-million tonnes a year. Tailings will be filtered and divided between underground cemented fill and dry stacking on the surface.

Net Present Value/Internal Rate of Return
Not stated.

Value
The updated mine plan has also pegged the initial capital cost of the project at $164.7-million, down from $177.5-million.

Duration
Based on the updated mine plan, and assuming that financing is in place and that project development can start in the third quarter of 2014, the latest schedule indicates that construction should be completed within 21 months, or the first quarter of 2016 (from late 2015), with a ramp-up to full production in the second quarter of 2016 (from the first quarter of 2016).

Latest Developments
Minera has encountered resistance from the local community, who has suspended its support for the project.

The tOllachea community has raised concerns about the status of the company's plans to reorganise its management structure and the specific role of certain individuals in the company.

Minera has said that it responded directly to community representative Senor Valeriano, reiterating its commitment to the community moving forward and assuring the community that the company will honour all its previous commitments.

The company will endeavour to work with the Ollachea community to address its other concerns. A general community meeting was held on August 15 and 16, where the matter was under discussion internally. Minera is awaiting the outcome.

The company has stressed that until these community issues are resolved, it cannot advance the project and, therefore, the expected August start-up of a 5 000 m exploration drill programme and the final negotiation of the engineering, procurement and construction management contract have been put on hold.

This embargo has increased the risk of the previously announced project financing not being completed, Minera has said.

Minera has advised that despite its expecting to arrive at a favourable resolution of the current situation, the outcome of these discussions remains uncertain.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Minera IRL VP: corporate relations, Trish Kent, tel +511 418 1230, fax + 511 4181270 or email minera@irl.com.pe.